The ruling brings more legal certainty for taxpayers
On May 13 2021, the Brazilian Supreme Court (STF) concluded the trial of one of the largest tax discussions in Brazil relating to the exclusion of ICMS (state sales tax) in the PIS/COFINS (federal contribution on total revenue) tax base (as discussed in Challenges and complexities of the Brazilian tax system).
March 2017 ruling
After more than 20 years of intense judicial debate, on March 15 2017, the STF’s Justices started to analyse and decide on the issue and adopted a favourable understanding for taxpayers, recognising and ruling, at that time, that ICMS should be excluded from the PIS/COFINS (federal contribution levied on revenue) taxable basis, as it is not characterised as gross revenues.